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https://www.exitstrategiesgroup.com/wp-content/uploads/2022/01/exit-horiz-1.png 0 0 Don Ross https://www.exitstrategiesgroup.com/wp-content/uploads/2022/01/exit-horiz-1.png Don Ross2015-08-20 12:46:082016-12-19 15:46:20Marketing a Business: The Need for Confidentiality
Maintaining confidentiality during the M&A sale process is a critical factor in successful business transactions.
At the onset, during the marketing phase of a business sale, you are walking a tightrope between those you want to inform and those you don’t. Confidential information is shared only with qualified buyers who have evidenced professional and financial capacity. Information is withheld from those, who by virtue of their relationship with the seller’s business, could prove detrimental to the ongoing operations or constituents of the business. Constituents can include employees, competitors, vendors and lenders.
Buyers want to buy a stable businesses. If employees learn that their employer is for sale, they may seek other employment to protect their income. Customers may begin to favor other sources for the company’s products or services. Key suppliers may begin seeking alternate channels to the market. Any of these events can erode business performance and stability, which translates to reduced value and increased risk for the current and future owner.
Marketing pieces include “blind executive summaries” where company name and location are not disclosed. Non disclosure agreements help to maintain confidentiality with buyers.
Information of a highly sensitive or competitive nature, such as customer lists and proprietary processes, should not be divulged prematurely. As the transaction progresses and the parties agree to terms, such information is safeguarded and discretely released to the buyer late in the due diligence process or when the transaction closing is imminent.
Finally, after the transaction closing, details of the transaction remain private. In 13 years of selling businesses, Exit Strategies has managed to keep the details of every private to private company transaction confidential.
It is the maintenance of confidentiality throughout the transaction that sustains the integrity and comfort of the business for both buyer and seller during the process and going forward.
For further information on maintaining confidentiality in a business sale process contact Don Ross.